Legalize / United Kingdom / Public General Act

Finance Act 2011

Type Public General Act

Publication 2011-07-19

Last updated 2025-03-20

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

Part 1 — Charges, rates, allowances etc

Income tax

Charge and main rates for 2011-12

1

(1) Income tax is charged for the tax year 2011-12.

(2) For that tax year—

(a) the basic rate is 20%,

(b) the higher rate is 40%, and

Rates of alcoholic liquor duties

2

(1) For the tax year 2011-12 the amount specified in section 10(5) of ITA 2007 (basic rate limit) is replaced with “ £35,000 ”.

(2) Accordingly section 21 of that Act (indexation of limits), so far as relating to the basic rate limit, does not apply for that tax year.

Personal allowance for 2011-12 for those aged under 65

3

(1) For the tax year 2011-12 the amount specified in section 35(1) of ITA 2007 (personal allowance for those aged under 65) is replaced with “ £ 7,475 ”.

(2) Accordingly section 57 of that Act (indexation of allowances), so far as relating to the amount specified in section 35(1) of that Act, does not apply for that tax year.

Corporation tax

Main rate for financial year 2011

4

(1) In section 2(2)(a) of FA 2010 (main corporation tax rate for financial year 2011 on profits other than ring fence profits), for “27%” substitute “ 26% ”.

(2) The amendment made by this section is treated as having come into force on 1 April 2011.

Charge and main rate for financial year 2012

5

(1) Corporation tax is charged for the financial year 2012.

(2) For that year the rate of corporation tax is—

(a) 24% on profits of companies other than ring fence profits, and

(b) 30% on ring fence profits of companies.

(3) In subsection (2) “ring fence profits” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).

Small profits rate and fractions for financial year 2011

6

(1) For the financial year 2011 the small profits rate is—

(a) 20% on profits of companies other than ring fence profits, and

(b) 19% on ring fence profits of companies.

(2) For the purposes of Part 3 of CTA 2010, for that year—

(a) the standard fraction is 3/200ths, and

(b) the ring fence fraction is 11/400ths.

(3) In subsection (1) “ring fence profits” has the same meaning as in Part 8 of that Act (see section 276 of that Act).

Increase in rate of supplementary charge

7

(1) In section 330 of CTA 2010 (supplementary charge in respect of ring fence trades), in subsection (1), for “20%” substitute “ 32% ”.

(2) The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 24 March 2011 (but see also subsection (3)).

(3) Subsections (4) to (10) apply where a company has an accounting period beginning before 24 March 2011 and ending on or after that date (“the straddling period”).

(4) For the purpose of calculating the amount of the supplementary charge on the company for the straddling period—

(a) so much of that period as falls before 24 March 2011, and so much of that period as falls on or after that date, are treated as separate accounting periods, and

(b) the company's adjusted ring fence profits for the straddling period are apportioned to the two separate accounting periods in proportion to the number of days in those periods.

(5) But if the basis of apportionment in subsection (4)(b) would work unjustly or unreasonably in the company's case, the company may elect for its profits to be apportioned on another basis that is just and reasonable and specified in the election.

(6) The amount of the supplementary charge on the company for the straddling period is the sum of the amounts of supplementary charge that would, in accordance with subsections (4) and (5), be chargeable on the company for those separate accounting periods.

See also sections 330A and 330B of CTA 2010 (which have effect in relation to the separate accounting period consisting of so much of the straddling period as falls on or after 24 March 2011).

(7) In relation to the straddling period—

(a) the Instalment Payments Regulations apply as if the amendment made by subsection (1) had not been made, but

(b) those Regulations also apply separately, in accordance with subsection (8), in relation to the increase in the amount of any supplementary charge on the company for that period that arises as a result of that amendment.

(8) In the separate application of those Regulations under subsection (7)(b), those Regulations have effect as if, for the purposes of those Regulations—

(a) the straddling period were an accounting period beginning on 24 March 2011,

(b) supplementary charge were chargeable on the company for that period, and

(c) the amount of that charge were equal to the increase in the amount of the supplementary charge for the straddling period that arises as a result of the amendment made by subsection (1).

(9) Any reference in the Instalment Payment Regulations to the total liability of a company is, accordingly, to be read—

(a) in their application as a result of subsection (7)(a), as a reference to the amount that would be the company's total liability for the straddling period if the amendment made by subsection (1) had not been made, and

(b) in their application as a result of subsection (7)(b), as a reference to the amount of the supplementary charge on the company for the deemed accounting period under subsection (8)(a).

(10) For the purposes of the Instalment Payment Regulations—

(a) a company is to be regarded as a large company as respects the deemed accounting period under subsection (8)(a) if (and only if) it is a large company for those purposes as respects the straddling period, and

(b) any question whether a company is a large company as respects the straddling period is to be determined as it would have been determined if the amendment made by subsection (1) had not been made.

(11) In this section—

“adjusted ring fence profits” has the same meaning as in section 330 of CTA 2010;

“the Instalment Payments Regulations” means the Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/3175);

“supplementary charge” means any sum chargeable under section 330(1) of CTA 2010 as if it were an amount of corporation tax.

Capital gains tax

Annual exempt amount

8

(1) Section 3 of TCGA 1992 (annual exempt amount) is amended as follows.

(2) For subsection (2) substitute—

(2) The exempt amount for a tax year is £10,600.

(3) For subsections (3) and (4) substitute—

(3) If there is a relevant increase in RPI in relation to a tax year— (a) the exempt amount is to be increased in accordance with Steps 1 and 2, and (b) subsection (2) has effect from then on (for that and subsequent tax years) as if it referred to the increased amount, unless Parliament otherwise determines. (3A) There is a relevant increase in RPI in relation to a tax year if the retail prices index for the September before the start of the tax year is higher than it was for the previous September. (3B) Steps 1 and 2 are— - Step 1 Increase the exempt amount for the previous tax year by the same percentage as the percentage of the relevant increase in RPI. - Step 2 If the result of Step 1 is not a multiple of £100, round it up to the nearest multiple of £100. (4) If there is a relevant increase in RPI in relation to a tax year, the Treasury must before the start of that tax year make an order showing the amount arrived at as a result of Steps 1 and 2.

(4) The amendment made by subsection (2) has effect for the tax year 2011-12 and subsequent tax years.

(5) For the tax year 2011-12, section 3(3) of TCGA 1992 (indexation) does not apply.

(6) The amendment made by subsection (3) has effect for the tax year 2012-13 and subsequent tax years.

Entrepreneurs’ relief

9

(1) In section 169N of TCGA 1992 (amount of relief: general)—

(a) in subsection (4) for “£5 million” substitute “ £10 million ”, and

(b) in subsection (4A) for “£5 million” substitute “ £10 million ”.

(2) The amendments made by this section have effect in relation to qualifying business disposals occurring on or after 6 April 2011.

Capital allowances

Plant and machinery writing-down allowances

10

(1) Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.

(2) In section 56 (amount of allowances and charges), in subsection (1) for “20%” substitute “ 18% ”.

(3) In section 104D (writing-down allowances: special rate expenditure)—

(a) in subsection (1) for “10%” substitute “ 8% ”, and

(b) after that subsection insert—

(1A) But, in relation to special rate expenditure incurred wholly for the purposes of a ring fence trade in respect of which tax is chargeable under section 330(1) of CTA 2010 (supplementary charge in respect of ring fence trades), the amount of the writing-down allowance to which a person is entitled for a chargeable period is 10% of the amount by which AQE exceeds TDR.

(4) Accordingly—

(a) in the heading for section 104D, after “at” insert “ 8% or ”, and

(b) in sections 56(2)(a) and 104E(1)(a), before “10%” insert “ 8% or ”.

(5) Part 10 of Schedule 22 to FA 2000 (companies within tonnage tax: capital allowances in respect of ship leasing), as it has effect (by virtue of section 57(9) of this Act) in relation to expenditure incurred before 1 January 2011, is amended as follows.

(6) In each of the following provisions, for “20%” (in each place) substitute “ 18% ”

(a) paragraph 94(3)(a) and (4),

(b) paragraph 95(4),

(d) paragraph 98(8), and

(e) paragraph 99(2) and (5).

(7) In each of the following provisions, for “10%” substitute “ 8% ”

(a) paragraph 94(3)(b) and (4),

(b) paragraph 95(4),

(d) paragraph 98(8), and

(e) paragraph 99(2).

(8) The amendments made by this section have effect in relation to—

(a) chargeable periods beginning on or after the relevant day, and

(b) chargeable periods beginning before, and ending on or after, the relevant day.

(9) But in respect of a chargeable period within subsection (8)(b), they have effect as if—

(a) in section 56(1) of CAA 2001 and the provisions of Schedule 22 to FA 2000 mentioned in subsection (6), references to 18% were references to X%, and

(b) in section 104D(1) of CAA 2001 and the provisions of Schedule 22 to FA 2000 mentioned in subsection (7), references to 8% were references to Y%.

(10) For the purposes of subsection (9)—

$X = ( 20 BRD CP ) + ( 18 ARD CP )$

$Y = ( 10 BRD CP ) + ( 8 ARD CP )$

(11) Where X or Y would be a figure with more than 2 decimal places, it is to be rounded up to the nearest second decimal place.

(12) In subsection (10)—

BRD is the number of days in the chargeable period before the relevant day,

ARD is the number of days in the chargeable period on and after the relevant day, and

CP is the number of days in the chargeable period.

(13) The relevant day is—

(a) for corporation tax purposes, 1 April 2012, and

(b) for income tax purposes, 6 April 2012.

Annual investment allowance

11

(1) Section 51A of CAA 2001 (entitlement to annual investment allowance) is amended as follows.

(2) In subsection (5) (maximum allowance), for “£100,000” substitute “ £25,000 ”.

(3) In subsection (8) (power to amend maximum allowance), for “other” substitute “ greater ”.

(4) The amendment made by subsection (2) has effect in relation to expenditure incurred on or after the relevant day.

(5) Subsections (6) and (7) apply in relation to a chargeable period (“the actual chargeable period”) which—

(a) begins before the relevant day, and

(b) ends on or after that day.

(6) The maximum allowance under section 51A of CAA 2001 for the actual chargeable period is the sum of each maximum allowance that would be found if—

(a) the period beginning with the first day of the chargeable period and ending with the day before the relevant day, and

(b) the period beginning with the relevant day and ending with the last day of the chargeable period,

were treated as separate chargeable periods.

(7) But, so far as concerns expenditure incurred on or after the relevant day, the maximum allowance under section 51A of CAA 2001 for the actual chargeable period is the maximum allowance, calculated in accordance with subsection (6), for the period mentioned in paragraph (b) of that subsection.

(8) Subsections (6) and (7) are also to apply for the purpose of determining the maximum allowance under section 51K of CAA 2001 (operation of annual investment allowance where restrictions apply) in a case where one or more chargeable periods in which the relevant AIA qualifying expenditure is incurred are chargeable periods within subsection (5), but the modifications in subsections (9) to (11) are to apply.

(9) There is to be taken into account for the purpose mentioned in subsection (8) only chargeable periods of one year or less (whether or not they are chargeable periods within subsection (5)), and if there is more than one such period, only that period which gives rise to the greatest maximum allowance.

(10) For the purposes of subsection (9) any chargeable period—

(a) which is longer than a year, and

(b) which ends in the tax year 2012-13,

is to be treated as being a chargeable period of one year ending at the same time as it actually ends.

(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12) Nothing in subsections (8) to (11) affects the operation of sections 51M and 51N of that Act.

(13) In this section “the relevant day” means—

(a) for corporation tax purposes, 1 April 2012, and

(b) for income tax purposes, 6 April 2012.

Short-life assets

12

(1) Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.

(2) In section 86 (short-life asset pool)—

(a) in subsection (2), for “four-year” (in each place) substitute “ relevant ”,

(b) for subsection (3) substitute—

(3) In this Chapter “the relevant cut-off” means— (a) if any of the qualifying expenditure incurred on the provision of the short-life asset was incurred before the designated day, the fourth anniversary of the end of the relevant chargeable period, and (b) in any other case, the eighth anniversary of the end of the relevant chargeable period. (3A) In subsection (3)— - “the designated day” means— 1. for corporation tax purposes, 1 April 2011, and 2. for income tax purposes, 6 April 2011; - “the relevant chargeable period” means— 1. the chargeable period in which the qualifying expenditure was incurred on the provision of the short-life asset, or 2. if the qualifying expenditure was incurred in different chargeable periods, the first chargeable period in which any of the qualifying expenditure was incurred.

, and

(3) In section 65 (the final chargeable period), in subsection (3), for “four-year” substitute “ relevant ”.

(4) In section 87 (short-life assets provided for leasing), in subsection (1)—

(a) in paragraph (b), for “four-year” substitute “ relevant ”, and

(b) in paragraph (c), for “4 years” substitute “ 8 years ”.

(5) In section 89 (disposal to connected person), in subsections (1) and (5), for “four-year” (in each place) substitute “ relevant ”.

(6) In Schedule 1 (defined expressions)—

(a) at the appropriate place insert—

relevant cut-off (in Chapter 9 of Part 2)	section 86(3)

, and

(b) omit the entry for “four-year cut-off (in Chapter 9 of Part 2)”.

Alcohol duties

Rates of alcoholic liquor duties

13

(1) ALDA 1979 is amended as follows.

(2) In section 5 (rate of duty on spirits), for “£23.80” substitute “ £25.52 ”.

(3) In section 36(1AA)(a) (standard rate of duty on beer), for “£17.32” substitute “ £18.57 ”.

(4) In section 62(1A) (rates of duty on cider)—

(a) in paragraph (a) (rate of duty per hectolitre in the case of sparkling cider of a strength exceeding 5.5 per cent), for “£217.83” substitute “ £233.55 ”,

(b) in paragraph (b) (rate of duty per hectolitre in the case of cider of a strength exceeding 7.5 per cent which is not sparkling cider), for “£50.22” substitute “ £53.84 ”, and

(5) For the table in Schedule 1 substitute—

TABLE OF RATES OF DUTY ON WINE AND MADE-WIN

Description of wine or made-wine	Rates of duty per hectolitre £
Wine or made-wine of a strength not exceeding 4 per cent	74.32
Wine or made-wine of a strength exceeding 4 per cent but not exceeding 5.5 per cent	102.21
Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not being sparkling	241.23
Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent but less than 8.5 per cent	233.55
Sparkling wine or sparkling made-wine of a strength of 8.5 per cent or of a strength exceeding 8.5 per cent but not exceeding 15 per cent	308.99
Wine or made-wine of a strength exceeding 15 per cent but not exceeding 22 per cent	321.61
Description of wine or made-wine	Rates of duty per litre of alcohol in wine or made-wine £
---	---
Wine or made-wine of a strength exceeding 22 per cent	25.52

(6) The amendments made by this section are treated as having come into force on 28 March 2011.

General beer duty: reduced rate for lower strength beer

14

(1) Part 3 of ALDA 1979 (beer) is amended as follows.

(2) In section 36 (general beer duty), in subsection (1AA) (rates of duty)—

(a) before paragraph (a) insert—

(za) in the case of beer that is of a strength which exceeds 1.2 per cent but does not exceed 2.8 per cent, £9.29 per hectolitre per cent of alcohol in the beer;

(b) in paragraph (a), after “that” insert “ is of a strength which exceeds 2.8 per cent and ”,

(d) in paragraph (c), after “small brewery beer” insert “ that is of a strength which exceeds 2.8 per cent and is ”.

(3) For the italic heading immediately preceding section 36A substitute “ Beer from small breweries ”.

(4) In section 36D (rate of general beer duty for small brewery beer from singleton breweries)—

(a) in subsection (2), after “section” insert “ , unless the beer is within section 36(1AA)(za) (rate for lower strength beer) ”, and

(b) in the heading after “beer” insert “ (other than lower strength beer) ”.

(5) In section 36F (rate of general beer duty for small brewery beer from co-operated breweries)—

(a) in subsection (2), after “section” insert “ , unless the beer is within section 36(1AA)(za) (rate for lower strength beer) ”, and

(b) in the heading after “beer” insert “ (other than lower strength beer) ”.

(6) Immediately above section 36H (power to vary reduced rate provisions) insert as an italic heading “ Power to vary rates ”.

(7) The amendments made by this section come into force on 1 October 2011.

New high strength beer duty

15

(1) Schedule 1 contains provision for and in connection with a duty of excise on high strength beer.

(2) The Commissioners for Her Majesty's Revenue and Customs are responsible for the collection and management of that duty.

Tobacco duties

Rates of tobacco products duty

16

(1) For the table in Schedule 1 to TPDA 1979 substitute—

1. Cigarettes	An amount equal to 16.5 per cent of the retail price plus £154.95 per thousand cigarettes
2. Cigars	£193.29 per kilogram
3. Hand-rolling tobacco	£151.90 per kilogram
4. Other smoking tobacco and chewing tobacco	£84.98 per kilogram

(2) The amendment made by this section is treated as having come into force at 6 pm on 23 March 2011.

Gambling duties

Rates of gaming duty

17

(1) In section 11(2) of FA 1997 (rates of gaming duty), for the table substitute—

Part of gross gaming yield	Rate
The first £2,067,000	15 per cent
The next £1,425,000	20 per cent
The next £2,496,000	30 per cent
The next £5,268,000	40 per cent
The remainder	50 per cent

(2) The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2011.

Amusement machine licence duty

18

(1) In section 23(2) of BGDA 1981 (amount of duty payable on amusement machine licence), for the table substitute—

Months for which licence granted	Category A £	Category B1 £	Category B2 £	Category B3 £	Category B4 £	Category C £
1	535	270	215	215	195	85
2	1070	535	425	425	385	160
3	1605	805	635	635	575	240
4	2140	1070	845	845	765	320
5	2675	1340	1055	1055	960	400
6	3210	1605	1265	1265	1150	480
7	3745	1875	1475	1475	1340	555
8	4280	2140	1685	1685	1530	635
9	4815	2410	1895	1895	1725	715
10	5350	2675	2105	2105	1915	795
11	5885	2945	2315	2315	2105	875
12	6110	3055	2405	2405	2185	905

(2) The amendment made by this section has effect in relation to cases where the application for the amusement machine licence is received by the Commissioners for Her Majesty's Revenue and Customs after 4 pm on 25 March 2011.

Fuel duties

Fuel duties: rates of duty and rebates from 23 March 2011

19

(1) HODA 1979 is amended as follows.

(2) In section 6(1A) (main rates)—

(a) in paragraph (a) (unleaded petrol), for “£0.5895” substitute “ £0.5795 ”,

(b) in paragraph (aa) (aviation gasoline), for “£0.3835” substitute “ £0.3770 ”,

(c) in paragraph (b) (light oil other than unleaded petrol or aviation gasoline), for “£0.6867” substitute “ £0.6767 ”, and

(d) in paragraph (c) (heavy oil), for “£0.5895” substitute “ £0.5795 ”.

(3) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas), for “£0.2615” substitute “ £0.2470 ”, and

(b) in paragraph (b) (other road fuel gas), for “£0.3304” substitute “ £0.3161 ”.

(4) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.1088” substitute “ £0.1070 ”, and

(b) in paragraph (b) (gas oil), for “£0.1133” substitute “ £0.1114 ”.

(5) In section 14(1) (rebate on light oil for use as furnace fuel), for “£0.1088” substitute “ £0.1070 ”.

(6) In section 14A(2) (rebate on certain biodiesel), for “£0.1133” substitute “ £0.1114 ”.

(7) The amendments made by this section are treated as having come into force at 6 pm on 23 March 2011.

Fuel duties: rates of duty and rebates from 1 January 2012

20

(1) HODA 1979 is amended as follows.

(2) In section 6(1A) (main rates)—

(a) in paragraph (a) (unleaded petrol), for “£0.5795” substitute “ £0.6097 ”,

(b) in paragraph (aa) (aviation gasoline), for “£0.3770” substitute “ £0.3966 ”,

(c) in paragraph (b) (light oil other than unleaded petrol or aviation gasoline), for “£0.6767” substitute “ £0.7069 ”, and

(d) in paragraph (c) (heavy oil), for “£0.5795” substitute “ £0.6097 ”.

(3) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas), for “£0.2470” substitute “ £0.2907 ”, and

(b) in paragraph (b) (other road fuel gas), for “£0.3161” substitute “ £0.3734 ”.

(4) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.1070” substitute “ £0.1126 ”, and

(b) in paragraph (b) (gas oil), for “£0.1114” substitute “ £0.1172 ”.

(5) In section 14(1) (rebate on light oil for use as furnace fuel), for “£0.1070” substitute “ £0.1126 ”.

(6) In section 14A(2) (rebate on certain biodiesel), for “£0.1114” substitute “ £0.1172 ”.

(7) The amendments made by this section come into force on 1 January 2012.

Vehicle excise duty

VED rates for light passenger vehicles, light goods vehicles, motorcycles etc

21

(1) Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.

(2) In paragraph 1 (general)—

(a) in sub-paragraph (2) (vehicle not covered elsewhere in Schedule otherwise than with engine cylinder not exceeding 1,549cc), for “£205” substitute “ £215 ”, and

(b) in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with engine cylinder capacity not exceeding 1,549cc), for “£125” substitute “ £130 ”.

(3) In paragraph 1B (graduated rates of duty for light passenger vehicles)—

(a) for the tables substitute—

CO₂ emissions figure	CO₂ emissions figure	Rate	Rate
(1)	(2)	(3)	(4)
Exceeding	Not exceeding	Reduced rate	Standard rate
g/km	g/km	£	£
130	140	105	115
140	150	120	130
150	165	155	165
165	175	255	265
175	185	305	315
185	200	435	445
200	225	570	580
225	255	780	790
255		990	1000
CO₂ emissions figure	CO₂ emissions figure	Rate	Rate
---	---	---	---
(1)	(2)	(3)	(4)
Exceeding	Not exceeding	Reduced rate	Standard rate
g/km	g/km	£	£
100	110	10	20
110	120	20	30
120	130	85	95
130	140	105	115
140	150	120	130
150	165	155	165
165	175	180	190
175	185	200	210
185	200	235	245
200	225	250	260
225	255	435	445
255		450	460

;

(b) in the sentence immediately following the tables, for paragraphs (a) and (b) substitute—

(a) in column (3), in the last two rows, “250” were substituted for “435” and “ 450 ”, and (b) in column (4), in the last two rows, “260” were substituted for “445” and “ 460 ”.

(4) In paragraph 1J (VED rates for light goods vehicles)—

(a) in paragraph (a), for “£200” substitute “ £210 ”, and

(b) in paragraph (b), for “£125” substitute “ £130 ”.

(5) In paragraph 2(1) (VED rates for motorcycles)—

(a) in paragraph (a), for “£15” substitute “ £16 ”,

(b) in paragraph (b), for “£33” substitute “ £35 ”,

(d) in paragraph (d), for “£70” substitute “ £74 ”.

(6) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2011.

VED rates for certain goods vehicles without road-friendly suspension

22

(1) Part 8 of Schedule 1 to VERA 1994 (rates for goods vehicles) is amended as follows.

(2) In—

(a) paragraph 9(1) (rigid vehicles exceeding 3,500 kilograms revenue weight in case of which pollution requirements are not satisfied), and

(b) paragraph 9A(2) (rigid vehicles exceeding that weight in case of which pollution requirements are satisfied),

after “(3)” insert “ and paragraph 11D ”.

(3) In—

(a) paragraph 11(1) (tractive units exceeding 3,500 kilograms revenue weight in case of which pollution requirements are not satisfied), and

(b) paragraph 11A(2) (tractive units exceeding that weight in case of which pollution requirements are satisfied),

for “paragraph 11C” substitute “ paragraphs 11C and 11D ”.

(4) In paragraph 11C(2) (tractive units between 41,000 and 44,000 kilograms revenue weight, with 3 or more axles and used for conveyance of semi-trailers with 3 or more axles and usable on public road in accordance with law immediately before 21 March 2000), for “The” substitute “ Subject to paragraph 11D, the ”.

(5) After paragraph 11C insert—

(11D) is £238. (1) This paragraph applies to goods vehicles which do not have road-friendly suspension. (2) A goods vehicle does not have road-friendly suspension if any driving axle of the vehicle has neither— (a) an air suspension (that is, a suspension system in which at least 75 per cent of the spring effect is caused by an air spring), nor (b) a suspension which is regarded as being equivalent to an air suspension for the purposes under Annex II of Council Directive 96/53/EC. (3) The annual rate of vehicle excise duty applicable to a rigid goods vehicle to which this paragraph applies and which has— (a) a revenue weight of 15,000 kilograms, and (b) two axles, (4) The annual rate of vehicle excise duty applicable to a rigid goods vehicle to which this paragraph applies and which— (a) is a vehicle with respect to which the reduced pollution requirements are satisfied, (b) has a revenue weight of 21,000 kilograms, and (c) has three axles, is £193. (5) The annual rate of vehicle excise duty applicable to a rigid goods vehicle to which this paragraph applies and which— (a) is a vehicle with respect to which the reduced pollution requirements are satisfied, (b) has a revenue weight of not less than 23,000 kilograms but less than 26,000 kilograms, and (c) has three axles, is £299. (6) The annual rate of vehicle excise duty applicable to a rigid goods vehicle to which this paragraph applies and which— (a) is a vehicle with respect to which the reduced pollution requirements are satisfied, (b) has a revenue weight of 27,000 kilograms, and (c) has four or more axles, is £314. (7) The annual rate of vehicle excise duty applicable to a tractive unit to which this paragraph applies and which has two axles and either— (a) has a revenue weight of 25,000 kilograms, or (b) is a vehicle with respect to which the reduced pollution requirements are satisfied and has a revenue weight exceeding 25,000 kilograms but less than 28,000 kilograms, is £266. (8) The annual rate of vehicle excise duty applicable to a tractive unit to which this paragraph applies and which— (a) has a revenue weight of 28,000 kilograms, (b) has two axles, and (c) is to draw semi-trailers with two or more axles, is £177. (9) The annual rate of vehicle excise duty applicable to a tractive unit to which this paragraph applies and which— (a) is a vehicle with respect to which the reduced pollution requirements are satisfied, (b) has a revenue weight of 31,000 kilograms, (c) has two axles, and (d) is to draw semi-trailers with two or more axles, is £403. (10) The annual rate of vehicle excise duty applicable to a tractive unit to which this paragraph applies and which— (a) is a vehicle with respect to which the reduced pollution requirements are satisfied, (b) has a revenue weight of 36,000 kilograms, (c) has three axles, and (d) is to draw semi-trailers with two or more axles, is £394. (11) The annual rate of vehicle excise duty applicable to a vehicle to which paragraph 11C and this paragraph apply and which— (a) is a vehicle with respect to which the reduced pollution requirements are satisfied, and (b) has a revenue weight less than 44,000 kilograms, is £464. (12) This paragraph does not apply to a vehicle for which the annual rate of duty is determined under paragraph 9(2) or 11(2).

(6) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2011.

Environmental taxes

Rates of climate change levy

23

(1) In Schedule 6 to FA 2000 (climate change levy), for the table in paragraph 42(1) substitute—

Taxable commodity supplied	Rate at which levy payable if supply is not a reduced-rate supply
Electricity	£0.00509 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility	£0.00177 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state	£0.01137 per kilogram
Any other taxable commodity	£0.01387 per kilogram

(2) The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2012.

Rate of aggregates levy

24

(1) Section 16 of FA 2010 (increase in rate of aggregates levy from 1 April 2011) is repealed.

(2) Accordingly, the amendment made by section 20 of FA 2008 (increase in rate of aggregates levy from 1 April 2009) continues to have effect in relation to aggregate subjected to commercial exploitation on or after 1 April 2011.

(3) This section is treated as having come into force on 31 March 2011.

Standard rate of landfill tax

25

(1) In section 42(1)(a) and (2) of FA 1996 (amount of landfill tax), for “£56” substitute “ £64 ”.

(2) The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2012.

Part 2 — Income tax, corporation tax and capital gains tax

Anti-avoidance provisions

Employment income provided through third parties

26

Schedule 2 contains provision about steps which are taken in pursuance of, or which have some other connection with, arrangements concerned with the provision of rewards or recognition or loans in connection with current, former or prospective employments.

Tainted charity donations

27

Schedule 3 contains provision about gifts and other disposals to charities and community amateur sports clubs.

Amounts not fully recognised for accounting purposes

28

Schedule 4 contains amendments of Parts 5 and 7 of CTA 2009 (loan relationships and derivative contracts) relating to cases where amounts are not fully recognised for accounting purposes.

Loan relationships involving connected debtor and creditor

29

Group mismatch schemes

30

Schedule 5 contains provision about group mismatch schemes.

Company ceasing to be member of group: availability of relief

31

(1) Section 179 of TCGA 1992 (company ceasing to be member of group: post-appointed day cases) is amended as follows.

(2) In subsection (2A)—

(a) for “Where” substitute “ Subsection (2AA) applies where ”, and

(b) for paragraphs (c) and (d) and the words following those paragraphs substitute—

(c) at the time company A ceases to be a member of the first group there is a connection between that group and the group of companies of which company A becomes a member on leaving the first group ( “ the second group ”), and (d) subsequently— (i) company A ceases to be a member of the second group, or (ii) (before sub-paragraph (i) applies) there ceases to be a connection between the two groups.

(3) After that subsection insert—

(2AA) Where this subsection applies— (a) in a case within subsection (2A)(d)(ii), for the purposes of this section (other than subsection (2A)) as it applies as respects the acquisition, company A and any associated company are to be treated as having ceased to be members of the second group at the time the connection between the two groups ceases, (b) subsection (1) has effect in relation to company A's ceasing to be a member of the second group as if it had been the second group of which both companies had been members at the time of the acquisition, and (c) subsection (2) may operate to prevent subsection (1) applying by virtue of paragraph (b), unless subsection (2AB) applies. (2AB) This subsection applies if company A's ceasing to be a member of the first group at the same time as one or more associated companies forms part of arrangements the main purpose, or one of the main purposes, of which is the avoidance of a liability to corporation tax.

(4) In subsection (2B) for “if, at the time when company A ceases to be a member of the second group” substitute “ at a particular time if, at that time, ”.

(5) The amendments made by this section have effect in relation to a company in any case in which the time of the company's ceasing to be a member of the first group is on or after 23 March 2011.

Leasing businesses

32

Schedule 6 contains provision about leasing businesses carried on by companies alone or in partnership.

Long funding finance leases

33

(1) Chapter 6 of Part 2 of CAA 2001 (which includes provision about lessees under long funding leases) is amended as follows.

(2) In section 70C (long funding finance lease: amount of capital expenditure), after subsection (4) insert—

(4A) But where the minimum lease payments include a relievable amount, the present value of that amount must be excluded in determining the commencement PVMLP. (4B) An amount (“amount X”) is a relievable amount if— (a) an arrangement is in place under which all or part of any residual amount (as defined in section 70YE) is guaranteed by the lessee or a person connected with the lessee, (b) amount X is within the minimum lease payments because of that arrangement (see subsection (1)(a) of that section), and (c) it is reasonable to assume that, were amount X to be incurred under the arrangement, relief would be available as a result (beyond relief, by virtue of this section and section 70E, because amount X is within those minimum lease payments). (4C) In deciding for the purposes of subsection (4B)(c) whether relief would be available as a result, no account is to be taken of— (a) any part of the arrangement other than the part by virtue of which all or part of the residual amount is guaranteed, or (b) any other arrangement connected with the arrangement or forming part of a set of arrangements that includes the arrangement.

(3) In section 70D (long funding finance lease: additional expenditure: allowances for lessee), after subsection (1) insert—

(1A) Any increase attributable to a relievable amount is to be ignored for the purposes of subsection (1)(d). (1B) Subsections (4B) and (4C) of section 70C apply (with any necessary modifications) for the purposes of this section as for the purposes of that section.

(4) In section 70E (disposal events and disposal values), in subsection (2C)(b), after “section 70YE)” insert “ other than any relievable payment ”.

(5) In that section, after subsection (2D) insert—

(2DA) A payment (“payment X”) is a relievable payment if— (a) an arrangement is in place under which all or part of any residual amount (as defined in section 70YE) is guaranteed by the lessee or a person connected with the lessee, (b) payment X is within the minimum lease payments because of that arrangement (see subsection (1)(a) of that section), and (c) it is reasonable to assume that relief would be available as a result of making payment X (beyond relief, by virtue of section 70C or 70D and this section, because payment X is within those minimum lease payments). (2DB) For the purposes of subsection (2DA)(c)— (a) “relief” has the meaning given in section 70C, and (b) subsection (4C) of that section applies as it applies for the purposes of subsection (4B)(c) of that section.

(6) The amendments made by subsections (2) and (3) have effect in cases where the arrangement is entered into on or after 9 March 2011.

(7) The amendments made by subsections (4) and (5) have effect in relation to payments made on or after 9 March 2011 (regardless of when the arrangement was entered into).

Investment companies

34

Schedule 7 contains provision about investment companies.

Exemptions and reliefs

Reduction in childcare relief for higher earners

35

Schedule 8 contains provision for reducing childcare relief for higher earners.

Childcare: salary sacrifice etc and the national minimum wage

36

(1) In section 270A of ITEPA 2003 (limited exemption for qualifying childcare vouchers), after subsection (5) insert—

(5A) Where the scheme under which the vouchers are provided involves— (a) relevant salary sacrifice arrangements, or (b) relevant flexible remuneration arrangements, Condition C is not prevented from being met by reason only that the scheme is not open to relevant low-paid employees. (5B) In subsection (5A)— - “relevant salary sacrifice arrangements” means arrangements (whenever made) under which the employees for whom the vouchers are provided give up the right to receive an amount of general earnings or specific employment income in return for the provision of the vouchers; - “relevant flexible remuneration arrangements” means arrangements (whenever made) under which the employees for whom the vouchers are provided agree with the employer that they are to be provided with the vouchers rather than receive some other description of employment income; - “relevant low-paid employees” means any of the employer's employees who are remunerated by the employer at a rate such that, if the relevant salary sacrifice arrangements or relevant flexible remuneration arrangements applied to them, the rate at which they would then be so remunerated would be likely to be lower than the national minimum wage.

(2) In section 318A of that Act (exemption for childcare other than employer-provided care), after subsection (5) insert—

(5A) Where the scheme under which the care is provided involves— (a) relevant salary sacrifice arrangements, or (b) relevant flexible remuneration arrangements, Condition C is not prevented from being met by reason only that the scheme is not open to relevant low-paid employees. (5B) In subsection (5A)— - “relevant salary sacrifice arrangements” means arrangements (whenever made) under which the employees for whom the care is provided give up the right to receive an amount of general earnings or specific employment income in return for the provision of the care; - “relevant flexible remuneration arrangements” means arrangements (whenever made) under which the employees for whom the care is provided agree with the employer that they are to be provided with the care rather than receive some other description of employment income; - “relevant low-paid employees” means any of the employer's employees who are remunerated by the employer at a rate such that, if the relevant salary sacrifice arrangements or relevant flexible remuneration arrangements applied to them, the rate at which they would then be so remunerated would be likely to be lower than the national minimum wage.

(3) The amendments made by this section have effect for the tax year 2005-06 and subsequent tax years.

Accommodation expenses of MPs

37

(1) In section 292 of ITEPA 2003 (accommodation expenses of MPs), after subsection (4) insert—

(5) The reference in subsection (1) to a payment made to a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009 includes a payment made under that section to another person at the direction of a member (see section 6(7) of that Act).

(2) The amendment made by this section has effect in relation to payments made under section 5(1) of the Parliamentary Standards Act 2009 on or after 1 November 2010.

Experts seconded to European Union bodies

38

(1) In Chapter 8 of Part 4 of ITEPA 2003 (employment income: special kinds of employment), after section 304 insert—

(304A) (1) No liability to income tax arises in respect of any subsistence allowances paid by a relevant EU body to persons who, because of their expertise in matters relating to the subject matter of the functions of the relevant EU body, have been seconded to the body by their employers. (2) Each of the following is a “relevant EU body”— (a) the European Medicines Agency, established as the European Agency for the Evaluation of Medicinal Products by Council Regulation (EEC) No 2309/93 of 22 July 1993, (b) the European Police College, established by Council Decision of 20 September 2005 (2005/681/JHA), (c) the European Banking Authority, established by Regulation (EU) No 1093/2010 of 24 November 2010, and (d) any other body established by an EU instrument which is designated as a relevant EU body for the purposes of this section by an order made by the Treasury.

(2) The amendment made by this section has effect in relation to subsistence allowances paid in respect of periods beginning on or after 1 January 2011.

Employment income: exemption for fees relating to monitoring schemes

39

(1) In Chapter 11 of Part 4 of ITEPA 2003 (employment income: miscellaneous exemptions), after section 326 insert—

(326A) (1) No liability to income tax arises by virtue of the payment or reimbursement of a fee in respect of an application to join the scheme administered under section 44 of the Protection of Vulnerable Groups (Scotland) Act 2007 (asp 14) (scheme to collate and disclose information about individuals working with vulnerable persons). (2) The Treasury may by order amend subsection (1) so as— (a) to add to the fees covered by that subsection a fee of a specified kind payable in connection with a scheme for England and Wales or Northern Ireland which corresponds to the scheme administered under section 44 of the Protection of Vulnerable Groups (Scotland) Act 2007, or (b) to amend or remove a reference to a fee added under paragraph (a).

(2) The amendment made by this section has effect for the tax year 2010-11 and subsequent tax years.

Individual investment plans for children

40

(1) Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans) is amended in accordance with subsections (2) to (5).

(2) In section 694 (income from individual investment plans), after subsection (1) insert—

(1A) In subsection (1) “income of an individual from investments under a plan” includes income from investments which is treated as the individual's income by virtue of section 629 (income paid to relevant children of settlor).

(3) After section 695 insert—

(695A) (1) This section applies where investment plan regulations provide that income of a child from investments under a plan (a “child plan”) is exempt from income tax (either wholly or to such extent as is specified in the regulations). (2) In addition to any provision which may be made by virtue of any other provision of this Chapter, investment plan regulations may— (a) specify descriptions of persons by whom investments may be made for a child, (b) provide that withdrawals may be made only in the circumstances specified in the regulations, and (c) provide that, in the case of a child who is under 16, the plan managers may act only on the direction of a person of a description specified in the regulations. (3) They may also provide— (a) that any assignment of, or agreement to assign, investments under a child plan, and any charge on or agreement to charge any such investments, is void, (b) that, on the bankruptcy of a child with investments under a child plan, the entitlement to those investments does not pass to any trustee or other person acting on behalf of the child's creditors, and (c) that, where a contract is entered into by or on behalf of a child who is 16 or over in connection with a child plan under which investments are held— (i) by the child, or (ii) by another child in relation to whom the child has parental responsibility, the contract has effect as if the child had been 18 or over when it was entered into. (4) Where, by virtue of provision made in investment plan regulations under subsection (2)(a), investments are made for a child under a child plan, for the purposes of this Chapter the child is treated as having made those investments. (5) In this section— - “assignment” includes assignation, and “assign” is to be construed accordingly; - “bankruptcy”, in relation to a child, includes the sequestration of the child's estate; - “charge on or agreement to charge” includes a right in security over or an agreement to create a right in security over; - “child” means an individual under 18; - “parental responsibility” means— 1. parental responsibility within the meaning of the Children Act 1989 or the Children (Northern Ireland) Order 1995, or 2. parental responsibilities within the meaning of the Children (Scotland) Act 1995; and any reference to investments being held by a child includes a reference to investments being held by plan managers on behalf of the child by virtue of section 696(1).

(4) In section 699 (non-entitlement to exemption), at the end insert—

(9) In this section references to an investor include an individual entitled to an exemption given by investment plan regulations by virtue of section 694(1A).

(5) In section 701 (general and supplementary powers), at the end insert—

(6) In this section references to an investor include an individual entitled to an exemption given by investment plan regulations by virtue of section 694(1A).

(6) In section 151 of TCGA 1992 (personal equity plans), in subsection (2)—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) for the words from “but with” to the end substitute

but with the following modifications— (a) any reference to income tax is to be read as a reference to capital gains tax, (b) the reference in section 695A(1) to the case where regulations provide that income of a child from investments under a plan is exempt from income tax is to be read as a reference to the case where regulations provide that a child who invests under a plan is entitled to relief from capital gains tax in respect of the investments, (c) the reference in section 695A(4) to that Chapter is to be read as a reference to this section, and (d) that Chapter has effect as if sections 699(9) and 701(6) were omitted.

Gift aid: increase of limits on total value of benefits associated with gifts

41

(1) In section 418 of ITA 2007 (gifts to charities by individuals: restrictions on associated benefits), in subsection (3), for “£500” substitute “ £2,500 ”.

(2) In section 197 of CTA 2010 (gifts to charities by companies: restrictions on associated benefits), in subsection (3), for “£500” substitute “ £2,500 ”.

(3) Accordingly, omit section 60(1)(b) of FA 2007.

(4) The amendments made by subsections (1) and (3) have effect in relation to gifts made on or after 6 April 2011.

(5) The amendment made by subsection (2) has effect in relation to gifts made in an accounting period ending on or after 1 April 2011.

Enterprise investment scheme: amount of relief

42

(1) Part 5 of ITA 2007 (enterprise investment scheme) is amended in accordance with subsections (2) to (4).

(2) In section 158 (form and amount of EIS relief), in subsection (2A) for “20%” substitute “ 30% ”.

(3) In the following provisions for “EIS rate” substitute “ EIS original rate ”

(a) section 209(3);

(b) section 210(1)(b);

(d) section 220(1)(b);

(e) section 224(2);

(f) section 229(1)(b).

(4) After section 256 insert—

(256A) In this Part “the EIS original rate”, in relation to EIS relief, means the EIS rate for the tax year for which the EIS relief was obtained.

(5) In Schedule 4 to that Act (index of defined expressions), at the appropriate place insert—

EIS original rate (in Part 5)	section 256A

(6) This section comes into force on such day as the Treasury may by order appoint.

(7) The amendments made by this section have effect in relation to the tax year 2011-12 and subsequent tax years.

(8) But where the EIS relief attributable to shares was obtained for the tax year 2007-08 or an earlier tax year, the references to the EIS original rate in the provisions mentioned in paragraph (a) to (f) of subsection (3) are to be read as references to 20%.

Relief for expenditure on R&D by SMEs

43

(1) Part 13 of CTA 2009 (additional relief for expenditure on research and development) is amended as follows.

(2) Chapter 2 (relief for small or medium-sized enterprises (“SMEs”)) is amended in accordance with subsections (3) to (6).

(3) In section 1044 (additional deduction in calculating profits of trade), in subsection (8), for “75%” substitute “ 100% ”.

(4) In section 1045 (alternative treatment for pre-trading expenditure: deemed trading loss), in subsection (7), for “175%” substitute “ 200% ”.

(5) In section 1055 (tax credit: meaning of “Chapter 2 surrenderable loss”), in subsection (2)(b), for “175%” substitute “ 200% ”.

(6) In section 1058 (amount of tax credit), in subsection (1)(a), for “14%” substitute “ 12.5% ”.

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12) This section comes into force on such day as the Treasury may by order appoint.

(13) The amendments made by this section have effect in relation to expenditure incurred on or after 1 April 2011.

Chargeable gains

Value shifting

44

Schedule 9 contains provision about value shifting.

Company ceasing to be member of a group

45

Schedule 10 contains provision about the consequences, for the purposes of corporation tax on chargeable gains, of a company ceasing to be a member of a group.

Pre-entry losses

46

Schedule 11 contains provision about losses accruing to a company before the time when it becomes a member of a group of companies and losses accruing on assets held by a company at such a time.

Foreign profits

Controlled foreign companies

47

Schedule 12 contains provision in relation to controlled foreign companies.

Profits of foreign permanent establishments etc

48

Schedule 13 contains provision about the profits of foreign permanent establishments of UK resident companies etc.

Investment trusts

Meaning of “investment trust”

49

(1) Chapter 4 of Part 24 of CTA 2010 (investment trusts) is amended as follows.

(2) For section 1158 (meaning of “investment trust” in the Corporation Tax Acts) substitute—

(1158) (1) For the purposes of the Corporation Tax Acts a company is an “investment trust” with respect to an accounting period if— (a) conditions A to C are met throughout the period, and (b) the company is approved for the period by the Commissioners for Her Majesty's Revenue and Customs (see section 1159). (2) Condition A is that the business of the company consists of investing its funds in shares, land or other assets with the aim of spreading investment risk and giving members of the company the benefit of the results of the management of its funds. (3) Condition B is that the shares making up the company's ordinary share capital (or, if there are such shares of more than one class, those of each class) are admitted to trading on a regulated market. (4) For this purpose “regulated market” has the same meaning as in Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments (see Article 4.1(14)). (5) Condition C is that the company is not— (a) a venture capital trust (within the meaning of Part 6 of ITA 2007), or (b) a company UK REIT (within the meaning of Part 12 of this Act). (6) The Treasury may by regulations provide— (a) for one or both of conditions A and B to be treated as met in the cases, and subject to any conditions, specified in the regulations, and (b) for the period for which the condition or conditions are treated as met. (7) The Treasury may also by regulations amend subsection (3) or (4). (8) A statutory instrument containing the first regulations under subsection (6) may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons. (9) Any other statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.

(3) For section 1159 (conditions for approval) substitute—

(1159) (1) The Treasury may by regulations make provision about the approval of a company for an accounting period for the purposes of section 1158(1)(b), including provision about— (a) applications for approval, (b) the determination of applications for approval, (c) requirements to be met by the company while approved, (d) the withdrawal of approval by notice, or (e) the consequences of the withdrawal of approval. (2) The regulations may, in particular— (a) include provision under which an application for approval— (i) is to be made by reference to the accounting period in which the application is made or such earlier or later accounting period as may be specified in the application, and (ii) is to constitute an application for approval for that and all subsequent accounting periods, (b) specify the form and content of, and information to accompany, an application, (c) permit or require the Commissioners to grant or refuse an application where conditions specified in the regulations are met (or appear to the Commissioners to be met) in relation to the company, (d) permit or require the Commissioners to withdraw approval where— (i) conditions specified in the regulations are met (or appear to the Commissioners to be met) in relation to the company, or (ii) the company has failed to comply with requirements imposed by the regulations, (e) include provision prohibiting a company from which approval has been withdrawn from reapplying, or (f) include provision under which approval may or must be withdrawn in relation to an accounting period that ends before the notice withdrawing approval is given. (3) Regulations under this section— (a) may make different provision for different cases or purposes, and (b) may make incidental, consequential, supplementary or transitional provision. (4) A statutory instrument containing the first regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons. (5) Any other statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons. (6) In this section “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs.

(4) Omit sections 1160 to 1165 (which relate to the interpretation of the provisions replaced by this section).

(5) In Schedule 4 (index of defined expressions), omit the following entries—

“company (in Chapter 4 of Part 24)”

“scheme of reconstruction (in Chapter 4 of Part 24)”

“shares (in Chapter 4 of Part 24)”.

(6) The amendments made by this section have effect in relation to accounting periods beginning on or after such day as the Treasury may by order appoint.

Power to make provision about treatment of transactions

50

In Part 13 of CTA 2010 (special types of company etc), after Chapter 3 insert—

(622A) (1) The Treasury may by regulations provide that a transaction of a specified kind entered into by an investment trust is to be treated for the purposes of the Corporation Tax Acts as entered into by it otherwise than in the course of a trade. (2) Regulations under this section— (a) may make different provision for different cases or purposes, and (b) may make incidental, consequential, supplementary or transitional provision. (3) A statutory instrument containing the first regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons. (4) Any other statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons. (5) In this section “specified” means specified in regulations under this section.

Miscellaneous

Taxable benefits: calculating the appropriate percentage for cars

51

(1) In section 139 of ITEPA 2003 (cars with a CO₂ emissions figure: the appropriate percentage), as substituted by section 59 of FA 2010 with effect for the tax year 2012-13 and subsequent tax years, in subsection (5) for “100 grams” substitute “ 95 grams ”.

(2) The amendment made by this section has effect for the tax year 2013-14 and subsequent tax years.

Furnished holiday lettings

52

Schedule 14 contains provisions about furnished holiday lettings.

Leases and changes to accounting standards

53

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Leasing companies: withdrawal of election

54

(1) In section 398A(1)(a) of CTA 2010 (election out of qualifying change of ownership), after “day”)” insert “ before 23 March 2011 ”.

(2) The amendment made by this section is to be treated as having come into force on 23 March 2011.

Companies with small profits: associated companies

55

(1) For section 27 of CTA 2010 (meaning of “associated company”: attribution to persons of rights and powers of their partners) substitute—

(27) (1) This section applies if— (a) it is necessary to determine in accordance with section 25(4) and (5) whether a company is an associated company of another company, and (b) the relationship between the two companies is not one of substantial commercial interdependence. (2) In the application of section 451 (meaning of “control”: rights to be attributed) for the purposes of the determination, any person to whom rights and duties fall to be attributed under subsections (4) and (5) of that section is to be treated, for the purposes of those subsections, as having no associates. (3) The Treasury may by order prescribe factors that are to be taken into account in determining whether a relationship between two companies amounts to substantial commercial interdependence for the purposes of this section.

(2) The amendment made by this section has effect in relation to accounting periods ending on or after 1 April 2011.

(3) But a company may elect that the amendment made by this section is of no effect in relation to an accounting period that begins before that date.

(4) An election under subsection (3) must be made within one year from the end of the accounting period to which it relates.

(5) The first order under section 27(3) of CTA 2010 (as substituted by subsection (1) of this section) may be made so as to have effect in relation to accounting periods ending on or after 1 April 2011.

Insurance companies: apportionment of amounts brought into account

56

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tonnage tax: capital allowances in respect of ship leasing

57

(1) Part 10 of Schedule 22 to FA 2000 (companies within tonnage tax: capital allowances in respect of ship leasing) is amended as follows.

(2) In paragraph 94 (quantitative restrictions on allowances)—

(a) in sub-paragraph (3)(a), for “a rate of 20% per annum” substitute “ the rate determined under sub-paragraph (3A) ”,

(b) in sub-paragraph (3)(b), for “a rate of 10% per annum” substitute “ the rate specified in section 104D(1) of the Capital Allowances Act 2001 ”,

(3A) The rate mentioned in sub-paragraph (3)(a) is— (a) if the rate of the writing down allowance to which the lessor would be entitled in respect of the expenditure apart from this paragraph is that specified in section 56(1) of the Capital Allowances Act 2001, that rate, and (b) otherwise, the rate specified in section 104D(1) of that Act.

(d) in sub-paragraph (4)—

(i) omit the words “within each of those bands”,

(ii) after “separate pools” insert “ in accordance with sub-paragraph (4A) ”, and

(iii) omit the second sentence, and

(e) after that sub-paragraph insert—

(4A) The expenditure is to be allocated to the following pools— (a) to the extent that it is expenditure in respect of which the lessor is entitled to writing down allowance at the rate specified in section 56(1) of the Capital Allowances Act 2001, a pool to be known as “the tonnage tax (main rate) pool”, and (b) to the extent that it is expenditure in respect of which the lessor is entitled to writing down allowance at the rate specified in section 104D(1) of that Act, a pool to be known as “the tonnage tax (special rate) pool”.

(3) In paragraph 95(4)—

(a) for “(4)” substitute “ (4A) ”, and

(b) for “20%” substitute “ tonnage tax (main rate) ” and for “10%” substitute “ tonnage tax (special rate) ”.

(4) In paragraph 97—

(a) in sub-paragraphs (2) and (3), for “20%” substitute “ tonnage tax (main rate) ” and for “10%” substitute “ tonnage tax (special rate) ”, and

(b) in sub-paragraph (4), for “10%” substitute “ tonnage tax (special rate) ”.

(5) In paragraph 98(8), for “20%” substitute “ tonnage tax (main rate) ” and for “10%” substitute “ tonnage tax (special rate) ”.

(6) In paragraph 99 (quantitative restrictions: change of circumstances taking case out of restrictions)—

(a) in sub-paragraph (2), for “20%” substitute “ tonnage tax (main rate) ” and for “10%” substitute “ tonnage tax (special rate) ”,

(b) in sub-paragraph (4), for the words from “the whole of” to the end substitute “ the amount that the tax written down value of the ship would have been, at the time the change of circumstances occurs, had paragraph 94 never applied. ”, and

(7) In consequence of the amendments made by this section, omit section 80(5) to (7) of FA 2008.

(8) The amendments made by this section have effect in relation to chargeable periods ending on or after 1 January 2011.

(9) But the amendments made by this section are of no effect in relation to expenditure incurred before that date.

Transfer pricing: application of OECD principles

58

(1) In section 164 of TIOPA 2010 (Part to be interpreted in accordance with OECD principles), for subsection (4) substitute—

(4) In this section “the transfer pricing guidelines” means— (a) the version of the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations approved by the Organisation for Economic Co-operation and Development (OECD) on 22 July 2010, or (b) such other document approved and published by the OECD in place of that (or a later) version or in place of those Guidelines as is designated for the time being by order made by the Treasury, including, in either case, such material published by the OECD as part of (or by way of update or supplement to) the version or other document concerned as may be so designated.

(2) The amendment made by this section has effect (in relation to provision made or imposed at any time)—

(a) for corporation tax purposes, for accounting periods beginning on or after 1 April 2011, and

(b) for income tax purposes, for the tax year 2011-12 and subsequent tax years.

Offshore funds

59

In Part 8 of TIOPA 2010 (offshore funds), after section 363 insert—

(363A) (1) This section applies to an offshore fund (within the meaning of section 355) which— (a) is, for the purposes of the UCITS Directive, an undertaking for collective investment in transferable securities, and (b) is authorised pursuant to Article 5 of the UCITS Directive in a Member State other than the United Kingdom. (2) If— (a) the offshore fund is a body corporate which, under the law of the Member State in which it is authorised pursuant to Article 5 of the UCITS Directive, is treated as resident in that State for the purposes of any tax imposed under that law on income, and (b) (apart from this section) the body corporate would be treated as resident in the United Kingdom for the purposes of any enactment (within the meaning of section 354) relating to income tax, corporation tax or capital gains tax, the body corporate is instead to be treated as if it were not resident in the United Kingdom. (3) If, by virtue of section 99 or 103A of TCGA 1992, that Act applies in relation to the offshore fund as if it were a company, that Act applies as if the company were neither resident nor ordinarily resident in the United Kingdom (if it would not otherwise do so). (4) In this section “the UCITS Directive” means Directive 2009/65/EC of the European Parliament and of the Council.

Index-linked gilt-edged securities

60

(1) In section 399 of CTA 2009 (index-linked gilt-edged securities: basic rules), for subsection (4) substitute—

(4) In this section and sections 400 to 400C— - “index-linked gilt-edged securities” means any gilt-edged securities under which the amounts of the payments are determined wholly or partly by reference to an index of prices published by the Statistics Board; - “relevant prices index”, in relation to an index-linked gilt-edged security, means the index of prices by reference to which the amounts of the payments under the security are wholly or partly determined.

(2) In the following provisions of that Act, for “retail” substitute “ relevant ”

(a) section 400(1)(b), (2), (3) and (6);

(b) section 400A(3) and (7)(b).

(3) Accordingly, in Schedule 14 to FA 2010, omit paragraph 4(4).

(4) The amendments made by this section have effect in relation to securities issued on or after the day on which this Act is passed.

Part 3 — Oil

PRT: areas treated as continuing to be oil fields

61

(1) In Schedule 1 to OTA 1975 (determination of oil fields), in paragraph 7(4), for “the relevant area” substitute “ those qualifying assets ”.

(2) The amendment made by this section has effect in relation to chargeable periods that begin after 30 June 2009.

Intangible fixed assets: oil licences

62

(1) Section 809 of CTA 2009 (oil licences) is amended as follows.

Reading this document does not replace reading the official text published on legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. We assume no responsibility for any inaccuracies arising from the conversion of the original CLML XML to this format.

This text is published under legislation.gov.uk's own terms of reuse, not a Legalize or public-domain licence. legislation.gov.uk
Open Government Licence v3.0 (attribution required)
© Crown and database right. Derived from content available under the Open Government Licence v3.0 from legislation.gov.uk.